Week 11 Workshop Sol - Week 11 Workshop Solutions EXERCISE...

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Week 11 - Workshop Solutions EXERCISE 17.26 (15 minutes) Environmental and social costing for decisions: orchard 1 An analysis of costs for the waste cleaning system for the next 10 years: Cost of new equipment* $489 345 Total operational cost ($15 904 × 10) 159 040 Total cost of cleaning of system ($14 900 × 2) 29 800 Total value of reclaimed water (15 987 × 10) (159 870) Total cost for 10 years $518 315 *The annual depreciation is an allocation of cost of the new equipment over its useful life and therefore is excluded from this analysis. Costs that will be avoided if the new system is purchased include the workers’ compensation claim of $5500. The cost of any fines that may relate to the leakage of waste into the Murray River is unknown. 2 The cost of the new waste water system is significant. In order to assess whether the new system should be purchased, the company will need to consider the impact of not implementing the system, and how much importance it places on these factors compared to the quantifiable cost. These factors include the impact of continuing to dump waste in the river on employees,
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  • Spring '14
  • water system

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